EXERCISE 8-21 (CONTINUED)

1. a. The predetermined overhead rate would be computed as follows:

Expected manufacturing overhead cost $2,200,000

Estimated direct labor-hours = 50,000 DLHs

=$44 per DLH

b. The unit product cost per pound, using the company’s present costing

system, would be:

Kenya

Dark Viet

Select

Direct materials (given) ... $4.50 $2.90

Direct labor (given) ... 0.24 0.24

Manufacturing overhead:

0.02 DLH × $44 per DLH... 0.88 0.88

Total unit product cost... $5.62 $4.02